Redundancy Pay Calculator UK 2026 — Statutory & Enhanced Pay Guide

Understanding your redundancy entitlements helps you know what to expect and negotiate. Here’s how to calculate statutory and enhanced redundancy.

Statutory Redundancy Pay

Qualifying Criteria

Requirement	Detail
Minimum service	2 years continuous
Employment status	Employee (not self-employed)
Genuine redundancy	Role no longer needed
Age	No upper limit

Calculation Formula

Your Age	Pay Per Year of Service
Under 22	0.5 week’s pay
22-40	1 week’s pay
41 and over	1.5 week’s pay

Weekly Pay Cap 2026/27

Maximum weekly pay used	£700
Maximum years counted	20
Maximum statutory redundancy	£21,000

Redundancy Calculator

Examples by Age and Service

Weekly Pay: £700 (capped)

Age	Years Service	Calculation	Statutory Pay
25	5 years	3 yr × 0.5 + 2 yr × 1 = 3.5 weeks	£2,450
30	8 years	8 yr × 1 = 8 weeks	£5,600
35	10 years	10 yr × 1 = 10 weeks	£7,000
40	15 years	15 yr × 1 = 15 weeks	£10,500
45	15 years	5 yr × 1 + 10 yr × 1.5 = 20 weeks	£14,000
50	20 years	20 yr × 1.5 = 30 weeks (capped at 20)	£21,000
55	25 years	Capped at 20 years = 30 weeks	£21,000

Full Calculation Table

Service: 15 Years

Age at Redundancy	Years at Each Rate	Total Weeks	Pay (at £700 cap)
30	7 yr × 0.5 + 8 yr × 1 = 11.5	11.5	£8,050
35	2 yr × 0.5 + 13 yr × 1 = 14	14	£9,800
40	15 yr × 1 = 15	15	£10,500
45	10 yr × 1 + 5 yr × 1.5 = 17.5	17.5	£12,250
50	5 yr × 1 + 10 yr × 1.5 = 20	20	£14,000
55	15 yr × 1.5 = 22.5 (capped)	20	£14,000

Working Backwards by Service Length

Years Service	Age 25	Age 35	Age 45	Age 55
2	£700	£1,400	£2,100	£2,100
5	£2,100	£3,500	£4,900	£5,250
10	£4,900	£7,000	£10,500	£10,500
15	£8,050	£10,500	£14,000	£14,000
20	£11,550	£14,000	£17,500	£21,000

Enhanced Redundancy

Common Enhanced Packages

Employer Approach	Multiplier	Example (10 years, age 40)
Statutory minimum	1×	£7,000
Double statutory	2×	£14,000
Actual week’s pay	Uncapped	£10,000+
Weeks per year of service	Varies	£5,000-50,000
Months per year	Generous	£40,000+

Enhanced Package Examples

Actual Salary: £52,000/year (£1,000/week)

Package Type	10 Years Service	Payment
Statutory (capped at £700)	10 weeks	£7,000
Actual weekly pay × years	10 weeks actual	£10,000
2 weeks per year (actual)	20 weeks	£20,000
1 month per year	10 months	£43,333

Negotiating Enhanced Redundancy

Leverage Point	How to Use It
Long service	Emphasise loyalty
Specialised skills	Hard to replace
Multiple offers	Negotiate between
Legal risks for employer	Settlement agreements
Early volunteer bonus	Often higher

Tax on Redundancy

Tax-Free Allowance

Component	Tax Treatment
Statutory redundancy	Tax-free (within £30,000)
Enhanced redundancy	Tax-free (within £30,000)
PILON (notice pay)	Taxable
Holiday pay	Taxable
Bonus	Taxable
Benefits in kind	Taxable

The £30,000 Threshold

Total Redundancy	Tax-Free	Taxable	Tax (40% rate)
£20,000	£20,000	£0	£0
£30,000	£30,000	£0	£0
£40,000	£30,000	£10,000	£4,000
£60,000	£30,000	£30,000	£12,000
£100,000	£30,000	£70,000	£28,000

Example: £50,000 Package Breakdown

Component	Amount	Tax Treatment
Enhanced redundancy	£35,000	£30k tax-free, £5k taxable
Accrued holiday (10 days)	£2,000	Taxable
Notice pay (worked)	£13,000	Taxable (PAYE)
Total	£50,000
Tax-free element	£30,000
Taxable element	£20,000	~£8,000 tax (40%)
Net received	~£42,000

Notice Pay (PILON)

If You Work Notice	If Paid In Lieu (PILON)
Normal PAYE applies	PILON is taxable
Salary as usual	No NI if genuine redundancy
Continues employment	Contract ends immediately

Other Entitlements

What Else You Should Receive

Entitlement	Detail
Accrued holiday	Paid out, taxable
Notice period	Work it or PILON
Pension contributions	Until leaving date
Private healthcare	Usually ends on leave date
Company car	Return or purchase option
Bonus	Pro-rata if in contract

Time Off for Job Hunting

If Service 2+ Years	Entitled To
Reasonable time off	To look for work
Paid	At usual rate
No standard amount	“Reasonable”

Timeline

Redundancy Process

Stage	Minimum Timeframe
Consultation (under 20 people)	No minimum
Consultation (20-99 people)	30 days
Consultation (100+ people)	45 days
Notice period	As per contract
Payment	Within normal pay cycle

When You’ll Be Paid

Payment Type	When
Statutory redundancy	With final pay
Enhanced redundancy	Often with final pay
PILON	With final pay
Holiday pay	With final pay

Alternatives to Redundancy

Before Accepting

Consider	Potential Benefit
Redeployment	Keep employment
Reduced hours	Partial income
Career break	Job to return to
Early retirement	If close to pension
Settlement agreement	Negotiate higher

Settlement Agreements

What They Are	Negotiated exit package
Often include	Enhanced pay, references
You give up	Right to tribunal claim
You must	Get independent legal advice
Employer usually pays	Your legal fees

After Redundancy

Immediate Steps

Action	Timing
Sign on for JSA/UC	Within 3 days if claiming
Update CV	Immediately
Check pension options	Review and consolidate
Financial review	Adjust budget

Benefit Entitlements

If Claiming UC	Effect of Redundancy Pay
Under £6,000 savings	No effect
£6,000-16,000	Tariff income applied
Over £16,000	May not be eligible

Plan before leaving if savings will exceed threshold.

Key Takeaways

1. Minimum 2 years service — to qualify for statutory
2. Age matters — over-41s get 1.5 weeks per year
3. £700 weekly cap — for statutory calculation
4. £30,000 tax-free — significant benefit
5. Negotiate — many employers pay more than statutory
6. Get advice — for settlement agreements

For related content, see our tax code checker guide, emergency fund guide, and jobseeker benefits.